Hi All, I bought my PPOR , a Townhouse in Melbourne last year. I have a loan balance of 560k, and the recent valuation of the property was 675k. Along with funds of about 70k in offset, I also expect to have access to another 160-170k in the next few months (inheritance). I am looking at buying a property with a value between 450-500k, with neutral to slightly negative cashflow (my understanding is cashflow is calculated based on P+I payments, other holding costs etc - is this correct? ) Sydney is obviously out of question, Melbourne still has some areas in the west like Tarneit , Wyndham Vale etc and north of Epping as well. Should I be buying here, or should I look at the 3rd biggest city , Brisbane?What areas of Brisbane should I start looking at? Are there any other areas I should be looking at, like Geelong etc? Any suggestions are welcome. My idea is to hold the property for longer term (10 years? ) without rental vacancy issues. I would appreciate any advise on my situation - thank you.
I'd be looking as close to middle ring southern Brisbane suburbs - avoiding townhouses as there is increasing supply coming on in Brissie which I think will temper the price growth of the asset subtype. You could get some decent quality property in Geelong for the deposit funds you've got available - the question is whether you would rather have all of your property based in Vic or potentially spread it across two markets to hedge your bets.
Thank you for your response - yes that is exactly why I would like to buy elsewhere. Do you have any specific suburbs in mind, I am aware there are a few flood prone areas but not sure which ones to start looking.
I would recommend that you read up on the "Logan Logan Logan" and the "Brisbane looks good" thread if you want to diversify. Lots of pages to read but you won't be spending as much money as what you will be in your investments so well worth your time. If you want to shorten your read, just have @JDP1 @Leo2413 on ignore and your reading will be halved Haha nah, its probably their posts that will be most valuable to you. Otherwise hop along to the Geelong and the Norlane/Corio threads for Geelong. It's important to know what strategy you're going for. We know that you have a TH worth 675k but not sure where it is. So it will be help to know whether you want CG, CF or both. Logan is likely a slow and steady growth but good yield; GC, blue chips and closer to the city are more CG (but I think it's already too late), north Brisbane likely both (you may be too late here as close to the future uni is over 400k last i looked). Hope this helps.
Thanks very much for your post. I have been reading the threads you suggested and there is quite a bit of info. When you say north Brisbane, which suburbs do you think I should focus on ? Regarding my TH, i still have a balance of 560k(bought last year) owing on it, but my plan to invest is based on availability of funds (~230k+) in the coming few months.
Given you know your budget, a good place to start might be in the invest section of realestate.com (Brisbane City Investment Property Market Data). Brisbane you should be looking at freestanding houses, and personally something within the 12km ring. Places I like where you may be able to pick up a place at your price range would be ferny hills, arana hills, keperra, wynnum west, tingalpa. In these areas with you contributing that much equity they should be CF+ for you.
Make sure you also read Terry's tips & threads on debt recycling to ensure deposit cash used becomes tax deductible & converting your PPOR debt to IP debt.
I'm not sure about too many southern, middle ring suburbs in Brisbane where you'd pick up a house for $450-500K. Places like Mt Gravatt, Carindale, Mansfield etc are from mid-500's upwards, and you'd probably need to head into Logan (which, for many Brisbane-ites, is not actually considered to be part of Brisbane).
For your budget centenary suburbs 4074 post code could be considered especially jindalee, jamboree heights and make sure there is no flood risk Otherwise townhouses around mt gravatt, carindale, Mansfield alternate choice good luck
Lots of options in Brisbane to invest $500,000. Corey made a very good point- avoid townhouses and units like the plague at the moment. I'm sure they'll be a great pick down the track, but they're toxic right now and I'm seeing evidence of this up to 50km outside of the CBD...! See my terrible MS Paint map attached; I'm a little hazy on the North Western suburbs so I'll let someone else make recommendations there. As for the rest of Brisbane; - North Eastern Airport Corridor. #1! So much going on up here in the next decade or so. - Bayside Brisbane. Still some decent buys around $500k, cashflow isn't great but popular areas and lovely places to live, plus landlocked and coastal, so strong growth is likely. - South East. Weirdly expensive, I'd be interested to hear what some other members think- is this area already inflated and running out of steam, or is it worth trying to SQUEEEZE in now and go on for the ride? - Mid-South. Gentrifying and developing, lots of industrial. An area like Acacia Ridge isn't a bad idea. - South-South. LOTS of Asian money, seriously inflated, somewhere like Algester is a nice pick but I don't like the rest (Stretton, Sunnybank, Sunnybank Hills, etc.) - South West. Old money, centenary suburbs, a nice safe pick. Stable. Watch for flooding. - Fringe South West. Some low socioeconomic areas ripe that are picked for good growth. Lots of development in Heathwood and Pallara that hasn't really taken off yet, I can't fathom why, it's so well priced. Forest Lake is a safe pick too, has always performed well, but your budget is a bit high for it.
To be honest, I haven't got a real solid $500k recommendation for Brisbane because there's SO many options. With a more restrictive budget like $350k it's much easier to suggest certain spots.
Rochedale South, free standing house on the biggest block of land you could find, 800m2+? Something to add value to would be my recommendation, small reno/makeover, potential to split the block...
